AMERICAN FARMERS.

New Zealand Herald, Volume LXII, Issue 19149, 15 October 1925, Page 12

AMERICAN FARMERS.

THE WAR AND THE SLUMP, FACING A LEAN PERIOD. RECOVERY NOW BEING MADE, The American farmer to day is facing problems extraordinarily liko those of his New Zealand cousin, and is solving them along very similar lines. This was very evident from facts stated in an interview yesterday by Mr, "W. 11. Porterfield, an American newspaper man of wide experience, who is at present in .Auckland. Mr. Porterfield, who has his home in San Diego, California, is a member of the editorial bo£,rd of the Scripps-Howard Newspapers, an organisation which controls 28 evening papers scattered over rnanv States of the Union, and which also owns tha United Press Association, one of the three large American press agencies, serving 700 newspapers, and the Newspaper Enterprise Association, which provides a service of syndicated matter for nearly as many He has spent five weeks in Australia and arrived at Auckland yesterday to mako a three weeks' tour of New s'ealand. His visit is partly a holiday and partly to gather material for articles on things seen in this part of the world. The development of land settlement and | farming is a matter of much interest to Mr. Porterfield, who has studied the problem;? of the American wheat grower for a number of years and now owns a share in a large fruitgrowing property in Southern California. Immediately after the war, said Mr. Porterfield, the wheat-farmers of North and South Dakota, lowa, Minnesota and Kansas suffered a change from great prosperity to virtual bankruptcy. In 1917, when America entered the war, the Government, in order to encourage the growing of the greatest possible quantity of wheat, which the world sorely needed, guaranteed the farmers 2dol. 26 cents a bushel, and undertook to buy all that they -would sell. The resnlt was an enormous inflation of land values and the | farmers, believing that the good times j would last indefinitely mortgaged their farms to the small local banks and bought more land. Droughts Alter Situation. Then a series of. droughts occurred in several of the wheat. States, and when j things were at their worst the Government removed the priee-fixation and cea-sed to buy. The result was that the banks, which had been financing the farmers, j came to grief. About tha year 1921 over 600 of them failed. A serious poli- 1 tical upheaval followed, leading to the rise of the Insurgent Party in Congress under the late Senator La Follette, the development of a legislative "bloc" in the interests of the fanners, and the genesis of the Non-partisan Labour Movement, an alliance between certain of the farmers and Labour. The measures taken by the Government to help the farmers over their difficulties?? | as described by Mr. Porterfield, showed a very general resemblance to what was done by the New Zealand Government after the slump of IS2I-22. The failure of the banks, he explained, was not so serious a matter as it sounded, for they were mostly quite small concerns. The depositors did not lose much of their money, but the stockholders, who bore full legal responsibility, lost everything they had invested. The farmers were mostly left in possession of their properties. virtually as liquidators. They did not "walk off." Federal Farm Loan Baak. There was a general demand for assistance from the Federal Farm Loan Bank, a nation-wide Government institution, which advances money to farmers on mortgage at per cent., plus sinking fund, for a term of 40 years. However, as the bank lent only on approved security, and wheat land values were extremely uncertain, it was at first unwilling to do much. The banks, however, agreed to a drastic writing down, and with the help, in some cases, of loans from the Federal Bank, tbe farmers were now gradually buying back their properties. They had had a hard struggle, but with the improvement of wheat prices last season they were now doing better. The Federal Government, Mr. Porterfield explained, was able to-day to meet most of the requirements of farmers in the way of long-term loans at a low rate of interest. There was no shortage of funds for the purpose, as he understood there was in New Zealand. In fact, the United States Government actually had too much money at its disposal, and there was some risk of extravagance Local land banks were scarcely called for. The accommodation which the wheat-farmer required from year to year was usually provided without difficulty in normal times by his co-operative marketing association, which made advances against wheat in store. The latter was regarded by the Federal Reserve banks as good collateral security. The Department of the Interior was assisting by undertaking large irrigation schemes for the development of Government lands which had previously been regarded as waste. Numbers of ex-sol-diers were being settled on these lands, and those in difficulty were granted generous postponements of the repayment of principal moneys advanced to them. There had been much agitation for Government land banks and marketing organisations, but nothing had been done in th is way. Dairy Fanners Escape. It was notable that the dairy farmer's in the wheat-growing region did not share at all in the hard times. They had an assured market at satisfactory prices for the whole of their output. Mr. Porterfield has great faith in the co-operative movement, which has been applied with excellent results to fruitgrowing in California, and more lately, to wheat production. He considers that the aid given to farmei-s by the American Department of Agriculture, which has ! vast sums at its disposal, an array of officials, and many activities, is doing almost more for the roan on the land than direct financial help. He mentioned that in the campaign against the cottonboll weevil the department actually mobilised some of the army, and sprayed insecticides over the fields from aeroplanes.